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The broker association has set out 16 pre-budget submissions covering home lending competition, cyber security, regulation, and sustainability and social impact initiatives.
The Mortgage & Finance Association of Australia (MFAA) has put forward 16 industry recommendations across four main areas for the Albanese government to consider in the 2025–26 federal budget:
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- Competition in the home lending sector.
- Continuing funding initiatives to combat scams, mitigate cyber security risks for small businesses, and support Australians in their transition to the digital economy.
- Prioritising fit-for-purpose regulation and policy settings for the mortgage and finance broking sector.
- Co-investing with the broking industry in environment sustainability and social impact initiatives.
The 2025–26 federal budget is scheduled for 25 March 2025 (although a potential early election could push this date back) and the deadline for pre-budget submissions was 31 January 2025.
Individuals, businesses, and community groups were invited to submit their ideas and priorities for the budget, which the government will reportedly consider when developing its budget policies and strategy.
In its submission, developed with feedback from broker and aggregator members, the industry body highlighted the important role brokers play in providing choice and competition in the lending market while outlining recommendations for the 2025–26 budget.
The MFAA said it expects 2025 to be an economically challenging year for Australians, with sustained cost-of-living pressures and constrained house supply impacting consumers and businesses, while driving demand for broker services.
As such, it has put forward a range of measures to improve home lending, including reviewing prudential regulation settings, such as the serviceability buffer.
Commenting on its recommendation to review APRA prudential settings, the MFAA said: “Our members have cited the rigid application of serviceability buffers under APRA’s standards as the number one barrier to refinancing for many borrowers, especially in the context of rising interest rates.”
The trade body is also calling on Treasury to reconsider levies for the Compensation Scheme of Last Resort (which recently announced that levies would skyrocket to $77.97 million across all subsectors and is set to be the subject of a government review).
The MFAA said: “It is crucial that any adjustments to the CSLR with respect to a special levy do not inadvertently impose a greater financial or regulatory burden on sub-sectors with minimal claims on the CSLR, including small broking businesses.”
In total, the MFAA’s recommendations for the upcoming budget are:
Competition in the home lending sector
1. Simplify government-backed home buyer schemes and partner with mortgage brokers to promote these schemes.
2. Review APRA prudential settings, including making the serviceability buffer more flexible, to reduce barriers for new borrowers and refinancers.
3. Implement a faster, smoother home loan discharge process.
4. Improve the Consumer Data Right.
5. Encourage all first home buyers to consult a mortgage broker.
Cyber security and consumers’ transition to digital
6. Educate and support small businesses – continue investment in the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), the Council of Small Business Organisations of Australia (COSBOA), and additional AI Adopt Centres to support service-based industries.
7. Standardise Digital ID and expand its use.
Financial regulation
8. Bring consistency and clarity to state and territory-based payroll tax legislation.
9. Reflect privacy changes in the Regulatory Implementation Grid (RIG) and set a timeline for removing the small business exemption from the Privacy Act Commission Legislation.
10. Align the Compensation Scheme of Last Resort (CSLR) levies with actual needs.
11. Make the instant asset write-off scheme permanent.
12. Update ASIC Regulatory Guide 206 Credit licensing: Competence and training to adopt the Diploma in Finance and Mortgage Broking as the minimum educational requirement as a matter of priority.
13. Continue to improve Financial Services Royal Commission Legislation (for example, by expanding the reportable situations regime to include aggregators that are not licensees or mortgage brokers).
Environmental and social impact initiatives
14. Invest in small business ESG education (including supporting funding for the ASBFEO to develop useful resources for small businesses in understanding their ESG obligations).
15. Help decarbonise residential property through brokers.
16. Continue initiatives to boost financial literacy, including investing in the National Debt Helpline.
The submission said: “Notwithstanding 2025 is a federal election year, the 2025–26 Federal Budget should continue to focus on assisting Australian borrowers – both consumers and small businesses – to weather challenging economic conditions through enhancing competition in the home loan sector and ensuring they have access to credit. In tandem, the Federal Budget should also focus on mitigating the risk of cybersecurity and continuing to enhance Australia’s environmental sustainability, while supporting Australians in their transition to the digital economy.”
[Related: MFAA sets out 8 recommendations to Senate home ownership inquiry]
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